Weekend Market Report
Newsletter Make Money Online Investing Gold Silver ZettelkastenWhat a difference a week makes in the markets! All the indices I track (Dow, Nasdaq, S&P500, Russell 2000) sputtered back to life and closed higher for the week. Gold and Silver moved higher while overall S&P500 volatility dropped. It looks like profits are back on the table!
To celebrate, I updated The Weekend Market Report format for readability, removed thee "below the fold" signup and streamlined a few things. Get your information and forecasts fast! Let's get started!
In this week's issue 📨
- A spotlight on my SPY credit spread trade
- Zettelkasten links
- Silver and Gold directional price forecasts
- S&P500 historical price forecast
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SPY Credit Spread Trade Spotlight
There's a Law of Karate from my old dojo that says, "Strike when the opportunity presents itself" and I did just that this month when the market fell off a cliff and volatility spiked!
On Monday, August 5, 2024, the market dropped in a panic and the VIX shot up to over 63.
When volatility like this spikes, it could remain volatile and move higher or the volatility could drop. I don't know what the market will do but I know how to capitalize on it.
I decided to hedge my bets and use this volatility spike to enter a SPY credit spread. A credit spread is when you sell a put option at-the-money (ATM) or just out-the-money (OTM) and then buy a put OTM. The credit spread is considered a Bullish trade as I'm expecting SPY to move higher from where I entered the trade.
I sold a 510 (Short) Put and bought a 505 (Long) Put, which netted me $0.94 of gross premium. That's $94 per contract. My risk is 5 points on the SPY and I hedged my risk by securing the Short Put with cash.
If the market moved against me the 505 Put would protect me and I could exit out of the Short Put, or if I get assigned the cash would cover the cost of buying SPY shares at 510.
SPY moved higher after Monday and I held onto this position for 4 days before closing it out and netting the premium.
Zettelkasten Links
Welcome to a collection of links and notes that I find interesting. Affectionately called a Zettelkasten, a German word for notes in a box.
- In AI, Smaller, Cheaper Models Are Getting Big Attention - via Yahoo
- Quantum Entanglement in Neurons May Actually Explain Consciousness - by Mike Mcrae
- Zuckerberg to explain why drug dealers are advertising on Facebook and Instagram - by Karissa Bell
- Video of Eric Schmidt blaming remote work for Google’s woes mysteriously vanishes - by Devin Coldewey Maxwell Zeff
- First case of more dangerous mpox found outside Africa - via BBC News
- Elon Musk’s financial woes at X have Tesla bulls fearing he will liquidate more stock - by Christiaan Hetzner
Silver price forecast 1 week ahead
Silver prices closed higher to $28.77 from $27.49 the week before. The price forecast was for lower prices this week, so the model was incorrect. The model forecast has been right 7 out 11 times (63%).
The price forecast for Silver next week is for lower prices.
Gold prices forecast 1 week ahead
Gold prices closed higher to $2,498.60 from $2,432.10 the week before. The price forecast was for lower prices this week, so the model was incorrect. The model forecast has been right 7 out 11 times (63%).
The price forecast for Gold next week is for flat prices.
S&P500 historical volatility forecast 1 week ahead
Volatility on the S&P500 closed lower to 0.128 from 0.319 the week before. The price forecast was for lower prices this week, so the model was correct. The model forecast has been right 8 out 11 times (72%).
The volatility forecast for the S&P500 next week is higher volatility.
Where are they now?
Premium members can access a list of my stock, ETF, and mutual fund holdings. You'll get access to a monthly Buy/Sell/Watch List update and can follow along and see if I'm making money. You'll have access to my trading strategy and my favorite market trading idioms and mistakes.